Kick-start Scheme

Jonathan Reynolds: (Urgent Question)  To ask the Secretary of State for Work and Pensions if she will make a statement on the implementation of the kick-start scheme.

Therese Coffey: Yesterday, the Government launched our new kick-start scheme, as set out in the written ministerial statement and the letter sent to all Members of both Houses. This £2 billion programme will fund the direct creation of thousands of additional jobs for young people at risk of long-term unemployment, to improve their chances of progressing to find long-term, rewarding and sustainable work.
As we build back our economy and return fully to work, a lack of work experience can be a barrier to stepping on to the jobs ladder, which is why, through kick-start, employers will be supported to access a massive recruitment pool of young people who want to work and are bursting with potential. Employers from all industries and across the private, public and voluntary sectors are eligible if they can meet our simple criteria on the provision of roles. Employers will need to show that these are additional jobs which provide the experience and support a young person needs to improve their chances of permanent employment. These need to be new roles that do not simply replace staff recently made redundant.
Funding available for each job covers the relevant national minimum wage rate for 25 hours a week, the associated employer national insurance contributions, and employer minimum automatic enrolment contributions, as well as £1,500 for wraparound support. There is no limit to the number of jobs that can be created, and organisations of all sizes are encouraged to participate.
If a business wants to offer only one or two kick-start jobs, as set out in the online guidance, employers can contact their local employer support managers with an expression of interest, and we will work to link them to an appropriate intermediary. These intermediaries could include local enterprise partnerships, local authorities or business groups, ensuring the necessary support is in place to deliver placements effectively. We will continue to be proactive on involving employers and intermediaries following the scheme’s launch yesterday.
We have already undertaken substantial engagement on our labour market strategy. I want to pay tribute to our civil servants in DWP and the Treasury who have brought this scheme to fruition, and I particularly want to thank and recognise my hon. Friend the Member for Mid Sussex (Mims Davies), the Minister for employment, who has worked tirelessly with her usual passion for helping young people get on in life and who I know will continue to do so.
Kick-start is a key strand of our plan for jobs focused on young people and will be a boost for the British economy. I want to encourage businesses and organisations all to take advantage of the most ambitious youth employment programme in our history and help kick-start to become a flying start for our young people.

Jonathan Reynolds: Since the crisis began, we have been urging the Government to introduce a scheme based on the last Labour Government’s hugely successful future jobs fund to get as many young people into work as possible. We therefore welcome the kick-start scheme in principle, but we want assurances that it will be delivered in a way that maximises its impact. On that note, it is disappointing that it has taken until September for the scheme to be launched, and it is disappointing to have to summon Ministers via an urgent question just to ask basic questions on how the scheme will work.
In July of this year, there were already over 1 million young people not in full-time education or full-time employment. This is an urgent problem and we believe that the three key tests of this scheme are: whether the jobs it provides are real, quality jobs; whether it is available to support smaller businesses as well as larger ones; and whether it provides opportunities for long-term employment beyond the initial subsidised placement.
I ask the Secretary of State, first, how the Government will ensure that the jobs provided under this scheme are genuinely new, additional jobs. That is essential for the scheme to be a success, but how will it be evidenced? Secondly, given the existing scale of need, how will the Government ensure that the jobs that are created go to those who need them most? Even if, say, 200,000 new jobs were created, we could reasonably expect over 1 million young people to be eligible for those jobs. We need those jobs to go where they will have the biggest impact.
Thirdly, what feedback have the Government already received on the arrangements the Secretary of State has outlined for small businesses to participate in the scheme, given that the minimum number of jobs that can be created from a bid is 30? I hope she understands the considerable strength of feeling that already exists from small businesses in relation to that point. Fourthly, the jobs will be for a minimum of only 25 hours a week, but the Secretary of State has already brought back conditionality and sanctions, expecting people to look for work for 35 hours a week. If the Government’s expectation is that everyone should be working 35 hours a week, why are the jobs that the Government themselves are creating not for 35 hours a week?
Finally, while welcoming the scheme, I was alarmed by the Prime Minister’s presentation yesterday of kick-start as an alternative to providing continued targeted furlough support. The furlough scheme was there to ensure that people had jobs to return to when the alternative for many people would have been redundancy if their employers did not have the revenue to meet their payroll. Those circumstances still exist in some businesses—not in all, but in some—and that is why countries such as Germany, France and Ireland are continuing their furlough schemes until 2021. Needed as this scheme is, it cannot be a replacement in those sectors that do not have the ability to train and recruit new staff yet, and I strongly urge the Secretary of State to acknowledge that point too.

Therese Coffey: I thank the hon. Gentleman for his sort of support for the kick-start scheme. I really think that across the House we should see this as an opportunity for us all to help young people in our constituencies. On the principles of the future jobs fund, we have actually taken some learnings from that, on where it worked and where it did not. He referred to the fact that it had taken  so long to get here, but we had the pandemic in March and this approach was announced in July. We have worked tirelessly on it and, as I say, I pay tribute to my civil servants in that regard. This is actually quite a contrast to the financial crisis of the late noughties, because I think I am right in saying that that placement scheme did not get going until October 2009. It was a long time before that happened, so we have worked at pace.
There are other elements from last time that we have learned from. Hardly any private sector businesses were involved, and the criteria were so stringent in different ways that, frankly, that scheme was very limited. I know that it is not about setting targets for these things, but the consequence of that was that the future jobs fund achieved just over 100,000 placements, although the ambition had been higher. So we have simplified the criteria.
The hon. Gentleman points to the threshold for small employers to get involved, but it is exactly the same threshold that applied to the future jobs fund, where businesses could only get involved by going through their local councils. We are opening this up in a different way, and I think we will start to see local enterprise partnerships and chambers of commerce getting involved as intermediary bodies, as well as councils. There is also a lot of support for this from many of the mayoral combined authorities.
The hon. Gentleman mentioned the number of hours per week. The reason for this is that this is not just about rebates like the coronavirus furlough scheme. Young people will be expected, with their employers, to do more to prepare themselves for the world of work, and that may include work search in additional time. So that is another reason why intermediaries are going to be a key element in helping some of our small businesses to provide these placements, as well as the wraparound support that will be required. On the other elements to which he referred, I know that he has tabled several written questions and he will be answered.

Andy Carter: I thank the Secretary of State for a very helpful update. By way of some instant feedback, I found in my inbox this morning many questions from employers in Warrington South who are already keen to be part of the kick-start scheme. Can my right hon. Friend confirm that the Government will pay 100% of the cost of wages, national insurance and pension schemes, so there is no reason why businesses in Warrington South cannot sign up and create new jobs for young people?

Neil Gray: We welcome any intervention that can protect jobs and secure the future of young people across these isles. The most effective intervention would, of course, be to extend the furlough scheme. I have three clear questions to ask in the time I have. First, why have the UK Government failed to respond to Scottish Government correspondence asking to work together on the implementation of the kick-start scheme, which is for Scotland, England and Wales? The Scottish Government have introduced a £60 million youth guarantee, which will guarantee every young person an opportunity for education, a job or training, backed by additional funding for apprenticeships and the new job start payment.
Secondly, why have the UK Government set as a minimum to qualify for the kick-start scheme that employers need to take on 30 new employees? Adding the bureaucracy set out yesterday will not help small businesses or young people in Airdrie and Shotts, and there is deep concern from the Federation of Small Businesses about this being a barrier, so why is there a 30-job minimum? Finally, will kick-start participants be paid the real living wage? I understand that they will not —why not?

Scott Benton: The kick-start scheme is a brilliant example of the lengths that this Government are going to in order to support employment across the whole country. Will my right hon. Friend join me in urging businesses in Blackpool South to sign up and take part in the scheme, so that we can make a real difference to the lives of young people in my constituency?

Jane Hunt: Does my right hon. Friend agree that the young people of this country are our future and that the kick-start scheme is both a huge help to them in securing work and gaining valuable experience and immensely helpful to businesses that are coming out of lockdown and getting back to business, as it helps them to add to their workforce?

Rachel Hopkins: What safeguards has the Secretary of State put in place to ensure that disabled young people are fully able to benefit from the kick-start programme? The employment rate for them stands at 37%, which compares with a figure of 57% for non-disabled people, so will she ensure that this new programme supports disabled young people?

Andrea Jenkyns: I welcome the opportunity for young people to gain work experience, but the objective of kick-start must be sustained employment. Will my right hon. Friend tell me how kick-start will help young people into work beyond the six-month placement?

Therese Coffey: It is widely recognised that getting is job is easier once someone has had work experience and is in a job already. This creation of thousands of additional jobs through this scheme will, in itself, help to stimulate young people’s chances of getting future long-term employment. This is only one of the offers being made to the young people in our country today—there will be different routes that people might take—but we are particularly focusing here on kick-start, where we are trying to avoid the long-term scarring that could happen if people do not get any work at all.

Jo Gideon: I welcome the opportunity that the kick-start scheme provides for many young people in Stoke-on-Trent Central whose employment prospects have been affected disproportionately in this pandemic. It is a great opportunity for them to get a foot on the jobs ladder. I thank my right hon. Friend for confirming that kick-start is open to employers from all sectors—large and small—businesses and charities. Will she confirm that information about this great scheme is readily accessible both to employers and to young people themselves?

Wendy Chamberlain: The award-winning Tayport Distillery in my constituency is very keen to take part in the kick-start scheme, but it is much harder for small businesses to apply, as they cannot do so directly if they are not taking on more than 30 people, and, frankly, intermediary bodies’ information seems to be, at best, in development. Given the delays already experienced—we still have a couple of months until the first participants start the scheme—will the Secretary of State make it easier for small businesses, which are the lifeblood of many economies, by allowing them to apply directly?

Sarah Dines: I thank my right hon. Friend for this announcement today. It has been truly inspirational telephoning large and small local businesses in Derbyshire Dales, as there is quite a level of excitement about the scheme. I know that she is determined to help young people across the country. It is crucial to their lives. Can she confirm what other support, other than the kick-start scheme, is available for young people to help them get over this pandemic?

Stephen Flynn: Paying some 17-year-olds £4.55 an hour for a three-day week for six months is welcome as far as it goes, but it is not going to avert the looming jobs crisis. The best way to avert that crisis is to extend the job retention scheme. Does the Secretary of State agree that that scheme should be extended, and if not, is this not less kick-start and more a kick in the teeth for millions of other workers living in the UK?

Therese Coffey: I do not know the hon. Member very well, but I am disappointed by his attitude. Candidly, millions of jobs have been protected by the furlough scheme, and we have extended that once already. He will be aware that Scotland has the highest unemployment rate in the UK. That is not a record for the SNP Government to be proud of, which is why we are ensuring that the kick-start scheme reaches all parts of Scotland. I hope that he will join in and try to make this a success in his great city of Aberdeen.

Hywel Williams: As our economy reopens following many challenging months, now is the time to build a recovery that will work for young people and the planet they will inherit by investing in green jobs. How will the kick-start scheme contribute specifically to our green recovery from covid-19?

Therese Coffey: The hon. Gentleman is right that part of building back better is about building back greener. In several of the sectors where we have been encouraging ways to get involved in kick-start as well as apprenticeships, it will be about that green recovery. As I said earlier, it is not that we can create in every individual job. That is why we are working with organisations and businesses to try to do that. I believe that this boost of paying wages for 25 hours a week for a young person who is bursting with potential and wanting to get into the world of work will be a boost to those companies in and around his constituency who want to have that green recovery.

James Davies: I very much welcome yesterday’s launch of the kick-start scheme, which can do much to help young people across Great Britain get into work. Since the launch, I have heard from a number of small business owners such as Hal Holmes-Pierce, who runs an independent shoe shop in Prestatyn and is keen to be involved. Will the Secretary of State reassure me that business owners such as Hal will be able to take part in the scheme?

Lilian Greenwood: As my right hon. Friend the Member for East Ham (Stephen Timms) and my hon. Friend the Member for Luton South (Rachel Hopkins) highlighted, young disabled  people are far more likely to experience unemployment. Even before the pandemic, 29% of disabled 16 to 24-year-olds were not in education, employment or training compared to 9% of their non-disabled peers. If they are black or working class, they are even more likely to experience unemployment. I heard what the Secretary of State said, but will she be clearer about what specific measures her Department is taking to ensure that the kick-start programme targets those who most need support? There is a real danger that they will be left completely behind and suffer even greater disadvantage during the pandemic.

Dan Jarvis: The UK is one of the most regionally unequal countries in the developed world, especially when it comes to employment, so will the Secretary of State say how the kick-start scheme fits with the Government’s levelling-up agenda? What guarantees can she give that communities such as the ones that I serve in South Yorkshire will get the additional support that they need?

Felicity Buchan: The future jobs fund was not a 100% success, although it had many merits. Will my right hon. Friend outline what improvements have been made in the kick-start scheme?

Therese Coffey: My hon. Friend is right; the future jobs fund did have some good achievements, and we have learned from what worked well and what did not work so well. The main thing I would point out is that this is a much bigger programme with a much wider range of involvement and, even if some of that is through an intermediary, every organisation can easily get involved. We have simplified the criteria. We are still making sure that these are new additional roles, but it is important that we try to get some of these placements under way. I am sure that we will have some very lively kick-starters starting their new jobs before the end of the year.

Owen Thompson: Midlothian is the fastest-growing region of Scotland, with record growth in new businesses operating there. They would welcome the chance to use the kick-starter scheme, but 93% of them are SMEs and cannot access the funding directly. Why is the Minister putting big business first and putting bureaucratic blocks in the road for small businesses, who are the backbone of the economy?

Selaine Saxby: Tourism is vital to north Devon, and many small tourism businesses such as Mill Park caravan and campsite in Berrynarbor are enthusiastic about recruiting local young people through the kick-start scheme. Will my right hon. Friend detail how smaller businesses wanting to take on just one or two young people in rural areas like north Devon can participate, when we are currently lacking any intermediaries?